Designing a Forensic Risk Assessment to support Audit Engagements: An Approach on Reducing the Audit Expectation Gap

Abstract

In the area of fraud or non-compliance cases, the general public’s opinion and expectations on the auditor might be vastly different. If the general public loses trust in the work done by the audit profession, investors may find it increasingly difficult to trust the audited firm. Many different attempts have been made to narrow the audit expectations gap. This paper investigates a way to ensure a full forensic audit is conducted if an organisation inhibits risks of fraud or non-compliance. The risk assesment is used as a tool for the auditors to improve the audit quality where necessary.